The Operations Manager for Shadyside Savings & Loan Orders Cash

question 35

Multiple Choice

The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine,which only dispenses $100 bills.She estimates that this machine dispenses an average of 12,500 bills per month,and that holding a bill in inventory costs 10 percent of its value annually.She knows that each order for these bills costs $300 for clerical and armoured car delivery costs,and that order lead time is six days. Assuming a thirty-day month,and without allowing for safety stock,at what point should bills be reordered?

• A)0 bills remaining
• B)417 bills remaining
• C)2,500 bills remaining
• D)10,000 bills remaining
• E)12,500 bills remaining

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Definitions:

IFRS

International Financial Reporting Standards, which are globally accepted guidelines for financial reporting established by the International Accounting Standards Board.

Perpetual Inventory System

This accounting practice immediately logs the sale or acquisition of inventory via computerized point-of-sale systems and software for managing enterprise assets.

Accounts Payable

Short-term debts or obligations a company owes to its suppliers or creditors for goods and services received.

Sales Returns and Allowances

Deductions from a company's sales revenue that account for returned goods and discounts or allowances given to customers.